STATUTORY DISPUTE RESOLUTION

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1 STATUTORY DISPUTE RESOLUTION The Employment Act (Dispute Resolution) Regulations 2004 set out the minimum steps that employers must follow (except in exceptional circumstances) when proposing to dismiss an employee or on receipt of a grievance. They will come into effect on 1 October 2004 and will apply to all employees. The Government promised simple procedures, which it said would aid dispute resolution in the workplace and thus reduce the number of Employment Tribunal applications. Time will tell whether the procedural complexities of the Regulations and promise of increased compensation awards will achieve this aim or whether it will actually lead to more Employment Tribunal claims being brought. BASIC PRINCIPLES The following principles apply to the statutory disciplinary and dismissal procedure ("DDP") and the grievance procedure ("GP"): each step/action must be taken without unreasonable delay; parties must take reasonable steps to attend arranged hearings; meetings must be conducted in a manner that enables both parties to explain their cases; timing and location of meetings must be reasonable; appeal meetings should as far as is reasonably practicable, be chaired by a more senior manager than the manager who attended the first meeting; employees have the right to be accompanied to meetings by an employee or Trade Union representative. No further detail is provided as to how meetings should be conducted, how evidence should be provided and considered. However, the revised ACAS Code of Practice on Disciplinary and Grievance Procedures (which is currently in draft form but due to come into force on the same date as the Regulations) sets out best practice in this regard and reinforces the principles of fairness set out in the current ACAS Code. Often a disciplinary process gives rise to a grievance. Meetings can be multi-purpose under the new statutory procedures, but it may be more manageable (and less confusing) to ensure that steps taken under the DDP and GP are kept separate. DISCIPLINARY ACTION AND DISMISSAL The DDP will normally apply when an employer contemplates dismissal (which now also includes a dismissal by reason of redundancy, compulsory early retirement or at the end of a fixed term contract), suspension without pay, demotion or some other formal sanction falling short of 1

2 dismissal. However, warnings and suspension on full pay are specifically excluded the DPP does not apply when only a warning is contemplated. The standard DDP procedure requires the employer to: send a written statement setting out the reasons for disciplinary action, together with an invitation to attend a disciplinary meeting hold a disciplinary meeting hand down a decision and inform the employee of their right to appeal hold an appeal hearing inform the employee of its final decision In extreme cases, for example where there has been serious violence or criminal wrongdoing, a modified DPP may be followed which requires the employer to: send a written statement setting out the reasons for dismissal inform the employee of their right to appeal hold an appeal hearing inform the employee of its final decision 2

3 Even where gross misconduct is alleged it will normally be sensible to suspend and thereafter follow the standard DDP the ACAS of Code of Practice states that it is unfair to dismiss without a fair hearing. Most employers already have written disciplinary procedures that meet or exceed the minimum standard required by the new Regulations. However, they must ensure that these minimum steps are followed in all circumstances. If the employer fails to complete the appropriate DDP, the employee will (if they have at least one year's continuous employment) have been automatically unfairly dismissed. If it was the employer's fault that the procedure was not completed, the tribunal must increase the employee's compensatory award by between 10% and 50%, unless there are exceptional circumstances justifying no increase. The basic award will be calculated as normal, but subject to a minimum of four weeks' pay (capped at 1,080). If it is the employee's fault that the procedure was not completed, his compensatory award must be reduced by between 10% and 50% (unless exceptional circumstances make this inequitable). An Employment Tribunal may still reach a finding of unfair dismissal if the appropriate DDP has been followed but the employer failed to conduct a reasonable investigation and hearing or had no genuine belief in the allegations or that the decision to dismiss was outside the range of reasonable responses. It is therefore critical to ensure that the procedure was fair overall. GRIEVANCE PROCEDURE If an employee has a grievance about something that could form the basis of an Employment Tribunal claim then, except in relation to "whistleblowing" disclosures, they must follow the standard GP and: send a written statement setting out their grievance be invited to a grievance meeting to discuss the grievance be provided with the employer's decision and their right to appeal against that decision attend an appeal hearing if they request it be informed of the employer's final decision 3

4 Where an employee has already left employment, perhaps in circumstances where he considered himself constructively dismissed, a modified GP must take place, which is as follows: the employee sends a written statement setting out the grievance and the basis for it the employer sends the employee a written response to the grievance there is no compulsory right of appeal the parties must agree in writing that the modified GP should apply as opposed to the standard GP If a grievance is about a dismissal (actual or contemplated) or other disciplinary action (unless that action is or would be discriminatory or on grounds different from those asserted by the employer) the GP does not apply. An employee cannot bring an Employment Tribunal claim about the subject matter of their grievance unless they have followed the appropriate GP and at least 28 days have elapsed. The Employment Tribunal will have discretion to extend time limits for lodging claims by up to three months beyond the normal three-month limitation period to enable the GP to be completed. It is unclear how this will interact with the modified GP. RECOMMENDED ACTION Read ACAS' revised Code of Practice on Disciplinary and Grievance Procedures. In good time before 1 October 2004, check that your disciplinary and grievance procedures are compliant. Train managers in relation to new procedures and give them appropriate checklists to follow. FURTHER RESOURCES The DTI has recently published a detailed guidance note in relation to the Employment Act 2002 (Dispute Resolutions) Regulations 2004 and associated provisions in the Employment Act 2002, which can be found on the DTI website. The draft ACAS code is available here: 4

5 The information contained in this note is intended as a general review of the subject featured and specialist advice should always be obtained before taking or refraining from taking any action. 5

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